Officials: Tax exemptions make Manchester magnet for elderly, veterans and the disabled

Staff ReportFebruary 12. 2014 11:36PMMANCHESTER - More than 2 percent of potentially taxable income in the city is eaten up by exemptions for the elderly, veterans and disabled people, a percentage far higher than other cities and towns, according to data compiled by city officials.

Some of the most generous exemptions go to disabled people, according to Robert Gagne, chairman of the city Board of Assessors. Disabled people qualify for a property-tax exemption as long as their income does not exceed $100,000 and their assets, not including their home, don't top $200,000.

The income limits in most other towns is far lower. The towns with the next highest, Candia and Merrimack, give exemptions to those making $50,000 or less. Bedford's is $35,000, and many towns offer none.

"We have people moving out of Derry and other towns and buying property in Manchester to apply for the exemption because it's not offered elsewhere," Gagne told aldermen who sit on the Committee on Administration and Information Systems.

The value of all optional exemptions and credits cost the city $5.52 million last year.

Facing a budget that is expected to be tight, city officials are looking at ways to find money other than raising the tax rate, which is limited by a tax cap.

Another idea is a $10 annual tax that the city can levy on any adult between the ages of 18 and 65. The city's Tax Collector estimated it could raise more than $600,000.

The resident tax was mandatory until 1986, when the Legislature made it optional. Manchester was one of the first cities to opt out. Collections was a big reason, said one veteran city official.

"It was logistically difficult, mailing bills and if the people had left (the city) we had no way of knowing," said Paul Martineau, the city's welfare commissioner who was an assessor in 1986.

Martineau said the city often over-estimated collections and would have to make up the money somewhere else when the revenue fell short. Martineau said the assessors would periodically abate, or wipe out, uncollected resident taxes.

In his presentation Wednesday, Gagne said Manchester ranks near the top of all New Hampshire communities when it comes to the exemptions and credits it offers its elderly, disabled and veterans.

Exemptions comprise 2.2 percent of the city's tax base, according to a compilation made by the city of Concord. Nashua followed at 1.6 percent. The lowest was Loudon, at 0.1 percent."The disabled exemption seems to be way out of whack," said Alderman Pat Long, who asked for more information on the exemptions. But he, like Alderman Barbara Shaw, said he'd like to make it easier for elderly people to obtain exemptions.

They said the income limitation — $32,000 for a single person and $45,000 for a married couple — should be increased to $35,000 for a single person. The limit was last set in 2006.

Other possible revenue generators:

• Boat registrations. The city Tax Collector could receive $40,000 a year if it processed boat registrations;

• Auto registration renewals. The Tax Collector could generate $80,000 if it levied a $1 fee on residents when they renewed their auto registration;

• Town Clerk fee. The city could generate $108,000 if it doubled a $1 fee for the registration renewals, transfers and new registrations. The drawback — the law would have to be changed;

• and advertising. Ads could be distributed with city registrations, and the city could distribute pouches for registration paperwork that included advertising. Potential income — $50,000.